we will derive a two state call option value in this problem. data S0=100, x=110, 1+r=1.10. the two possibilities for ST are 140 and 90

a) what is the hedge ratio of the call?

b) form a portfilui if three shares of stock and short 5 calls. what is the nonrandim payoff to thid portfolio?

c) what is the present value of the portfolio

d) given yhat the stock current sells at 100, what is the value of the call

e) verify yhat the put call parity relationship is satisgurd by amswer D: given value of put =10.91